Subsequent application for start-ups funding relief facility soon to open

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Category: MDV in the News Post Date: June 2, 2020

Subsequent application for start-ups funding relief facility soon to open

KUALA LUMPUR, 1 June 2020 – Malaysia Debt Ventures Berhad (MDV) today announced the closing of the first application window for the RM100 million Technology Start-Ups Funding Relief Facility (TSFRF), which was opened for applications beginning 18 May 2020 until 31 May 2020.

During this period, MDV had received a total of 49 applications under the TSFRF, with financing amount requested between RM1 million to RM2.5 million, from eligible technology companies in various technology sectors including ICT, E-commerce, Logistics, Fintech, Big Data, Medical, property related apps and Electric Vehicle (EV).

MDV’s Chief Executive Officer, Nizam Mohamed Nadzri said that as the TSFRF is yet to be fully committed, the subsequent application window for the facility will run for another two weeks starting 8 June 2020 until 21 June 2020.

He added that gap between the application periods is to allow for MDV to proceed with the screening process by the facility’s dedicated screening committee so that they are able to keep to the faster processing time frame under the facility and ensure timely disbursement to successful applicants.

All applications will be screened based on three main criteria i.e. the company’s strategic positioning in its related segment/sector; its potential for regional/global growth; and its competitive positioning.

Factors that will be considered within the above criteria include Management, Venture Capital Investor Support, Revenue and Revenue Growth, Enterprise Value, Market Opportunity and Competitiveness.

Following the screening by the committee, all applications are then required to go through MDV’s credit assessment.

Nizam explained that the majority of the technology companies that had applied for the TSFRF are those with strong fundamentals and viable business model that yield an average revenue of between RM100 thousand to RM700 million with company valuation of between RM5 million to RM500 million

He also added that however, due to the current economic and business conditions, these companies are in need of an immediate cash flow support to keep their business afloat and to continue to grow, which is what the TSFRF was developed for.

The TSFRF, which is offered in the form of working capital and business expansion requirements, aims to provide immediate, affordable and targeted cash flow support for VC or Government Agency-backed technology start-ups companies that are impacted by the current adverse economic conditions and funding disruptions.

The facility is targeted to benefit between 40 to 60 technology start-ups to address liquidity challenges by having on-hand working capital facilities to mitigate cash flow issues going forward.

The facility is offered at an interest rate of 3.5% per annum on the amount outstanding.

Since the initial announcement on the TSFRF by the Minister of Science, Technology & Innovation, Yang Berhormat Khairy Jamaluddin, MDV had received overwhelming enquiries from technology start-ups on the financing facility.

As part of its efforts to introduce and promote the facility, MDV had arranged several webinar sessions for potential applicants in collaboration with agencies such as Malaysia Digital Economy Corporation (MDEC), Agensi Inovasi Malaysia (AIM), Scaleup Malaysia, Invest Penang and Malaysia Venture Capital & Private Equity Association (MVCA), including an open session streamed via MDV’s FB Live platform.

For further information on the TSFRF, please visit MDV’s website.

-Money Compass